If you 'format' a CD-RW then what you're talking about is UDF (or UDFS) which is the drag'n'drop or 'packet CD' CD-RW standard. In this case, yes, you will only get around 500 Mb because the formatting takes up space. I'm not sure of the exact figure.

To back up a hard disk, it is actually more practical to use the standard ISO/Joliet format, which is the same as any 'real' CD, and can use the whole 650 Mb (or thereabouts). This has to be done using whatever CD burning application came with the drive (e.g. WinOnCD, Adaptec ??, etc.)

I would recommend purchasing some software that will automate the HD backup process, because it gets very confusing doing it by hand. I know that HP give backup and restore software away with some of their drives; perhaps it can be bought separately.

So if you burn your data on a CD-RW in ISO or Joliet format, can you then later just format the disk if you want to use packet CD? And can you erase the disk to burn new data on it? I would assume so since that seems to be the point of CD-RW but I don't have much experience with rewriteable cd's.

I've run into an interesting problem. While at college I bought a cd-rw drive (Mitsumi CD-4804TE), now when I used directCD to format it the formatting took up about 32 MB. When I got home I tried to use it seriously for the first time and found out that the adaptec deluxe cd stuff didn't recognize the drive (even though directcd did). Of course I asked my dad and he thought that there was something very wrong with the drive as his HP took and hour to format a disk and used over 100 MB. Anyone have any clue whats going on? (oh ya, I got Nero and my drive is now working great)